COMPLIANCE with international labour standards as well as national labour laws has never been a strong point of the country’s manufacturing industry.

The situation has progressively worsened over time owing to the ‘underdeveloped’ trade union movement and the inability of successive governments to enforce labour standards and laws.

Compliance with labour standards in the industry suffered particularly when the provincial governments in Punjab and Sindh — where most of the manufacturing is located — capitulated under pressure of the manufacturers and abolished workplace inspections in the early 2000s without implementing an alternate mechanism.

For example, most textile and clothing manufacturers outside the corporate sector, who represent almost half of the country’s manufacturing industry, neither pay minimum wages to their workers nor register them with the Employees Old-Age Benefits Institution (EOBI) or provincial Employees Social Security Institution (ESSI) to cut their direct costs.

To register with the EOBI, a manufacturer has to contribute from his own pocket about Rs700 per registered employee per month. In the case of SESSI, he has to pay 6pc of the salary of each registered worker per month.

Consequently, the workers and their families are deprived of pension and health benefits. “Although successive governments have been quick to allow cash, tax and other initiatives to manufacturers and exporters, none of them formulated a labour policy to protect workers’ rights,” says labour leader Hanif Ramay.

According to a Pakistan Hosiery Manufacturers Association (PHMA) official, most units register only 50-60pc of their workers with these two institutions.

The working conditions for women employed in small-scale readymade garment factories are even harsher. They have to work longer hours and get almost two-third of the wages given to their male co-workers. The large-scale garment exporters are an exception.

The PTEA-ILO programme will put in place mechanisms to monitor and report on the application of and adherence to labour standards

A Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) official also confirmed the lack of enforcement of labour standards and minimum wage and social security laws by most garment producers and exporters.

Yet, he says medium- to large-sized units having direct links with foreign buyers do comply with all social and labour standards because, otherwise, it can mean a loss of business.

The state of compliance with labour standards in other segments of the textile chain — weaving (unorganised power loom sector), processing, made-ups etc — isn’t much different from the situation in the apparel (garment and hosiery) sector.

The incidents of fire at a Karachi garments factory where more than 200 workers lost their lives, and later in an unregistered Lahore shoe factory in 2012 that killed 25 workers, have exposed growing gaps in workplace safety arrangements and labour-standard compliance — both in the organised and unorganised sectors.

The fire incidents, especially the Karachi factory blaze, are believed to be a major reason that forced Disney World to pull out of Pakistan last year. This directly affected around 30 garment manufacturers in Faisalabad, Lahore and Karachi, and caused annual export losses of $150m.

Shocked by the renewed focus of consumers in America and Europe (including England) —home to 60pc of Pakistan’s total textile and clothing exports — in the wake of the fire incidents, a majority of exporting units are said to have voluntarily started implementing actions to ensure workplace safety.

The PHMA official says the fear of losing business in these markets has compelled the employers producing for major foreign brands or stores to ensure compliance with labour safety standards at their units. Yet, he says, the majority of the producers, save the large-scale exporters, are still reluctant to register all of their workers with EOBI and SESSI.

Another development that has compelled the employers to change is the grant of trade concessions by the EU under its GSP+ scheme. The non-enforcement of labour standards contained in ILO conventions could force the EU to withdraw the facility.

According to the ILO, Pakistan has undertaken legislation reforms to remove discrepancies with the conventions, but there is still a need for the government to strengthen institutional mechanisms to effectively implement labour laws to establish decent working conditions, and see to it that these labour laws are adhered to by the manufacturers.

GSP+ requirements of social, governance and labour standards have spurred almost the entire textile chain into action to implement UN and ILO conventions on these areas.

The Pakistan Textile Exporters Association (PTEA), for instance, has collaborated with the ILO to promote decent work culture in the textile industry in Faisalabad. The three-year initiative will cost $9m, of which the PTEA will provide $1.8m. The rest of the funds will be generated by the ILO from other sources.

Similarly, the All Pakistan Textile Mills Association (Aptma) is being helped by GIZ and the World Wide Fund (WWF-Pakistan) in implementing sustainable production processes, social compliance projects and better cotton initiatives. The PHMA and PRGMEA are also participating in joint labour standards programmes created by the Punjab labour department with the help of GIZ.

“The objective of our initiative is to improve the image of textile factories as responsible workplaces that are compliant with national laws and international labour standards,” PTEA Chairman Sohail Pasha told Dawn.

The PTEA-ILO programme will put in place mechanisms to monitor and report on the application of and adherence with labour standards, increase transparency in employment conditions, contractual rights and obligations at workplaces through social dialogue between the employers and the employees, and enhance labour productivity.

The manufacturers, nevertheless, complain that the government has done little more than provide lip service to help them bring about change at their workplaces. “There are some environmental and social standards that are hard to meet for the industry on its own without financial help from the government,” points out Pasha.

Not every businessman can afford a water treatment plant. It has to be a government-sponsored initiative for each industrial cluster. “GSP+ is an opportunity for us and the collaboration between the ILO and the PTEA will help improve the image of Pakistan’s textile factories as responsible workplaces that are compliant with national laws and international standards.”

One can only hope that the employers and the government will not throw away the opportunity offered by the GSP+ to reform our factories and make them worker-friendly.

Published in Dawn, Economic & Business, February 23rd , 2015

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